The formulas
| Metric | Formula | Tells you |
|---|---|---|
| CPM | Spend ÷ impressions × 1,000 | The price of reach |
| CPC | Spend ÷ clicks | The price of a visit |
| CTR | Clicks ÷ impressions × 100 | How well the ad grabs attention |
| Conversion rate | Leads ÷ clicks × 100 | How well the page turns visits into leads |
| Cost per lead | Spend ÷ leads | What you really pay for an enquiry |
Which number should you watch?
Cost per lead or cost per sale is the one that pays the bills. CPM, CPC and CTR explain why it moves: a high CPM means a crowded or narrow audience; a low CTR means the ad isn't grabbing attention; a low conversion rate points at the landing page or offer.
How to bring costs down
- Test new creative regularly — the ad itself is the biggest lever on CTR.
- Give platforms broader audiences to find cheaper impressions, once tracking is reliable.
- Send clicks to a fast landing page made for the offer, not your home page.
- Follow up every lead within minutes, so more leads turn into customers.